AA12CR36

AS (2012) CR 36

 

Provisional edition

2012 ORDINARY SESSION

________________________

(Fourth part)

REPORT

Thirty-sixth Sitting

Friday 5 October 2012 at 10 a.m.

In this report:

1.       Speeches in English are reported in full.

2.       Speeches in other languages are summarised.

3.       Speeches in German and Italian are reproduced in full in a separate document.

4.       Corrections should be handed in at Room 1059A not later than 24 hours after the report has been circulated.

The contents page for this sitting is given at the end of the verbatim report.

Ms Woldseth, Vice-President of the Assembly, took the Chair at 10.05 a.m.

THE PRESIDENT – The sitting is open.

Ladies and gentlemen, welcome to the last day of our fourth part-session of 2012. There are not many of us here, but the most engaged and most important people are, so let us make a start.

1. Changes in the membership of committees

THE PRESIDENT – Our first business is to consider the changes proposed in the membership of committees. These are set out in document Commissions 2012, 07 Addendum 4.

Are the proposed changes in the membership of the Assembly’s committees agreed to?

They are agreed to.

2. Restoring social justice through a tax on financial transactions

THE PRESIDENT – Our next item of business this morning is the debate on the report entitled “Restoring social justice through a tax on financial transactions”, Document 13017, presented by Ms Naghdalyan on behalf of the Committee on Social Affairs, Health and Sustainable Development. I remind members that speaking time is limited to three minutes.

If necessary, I shall interrupt the list of speakers at about 11.35 a.m. to allow time for the reply and the vote.

I call Ms Naghdalyan, rapporteur. You have 13 minutes for presentation of the report and reply to the debate.

Ms NAGHDALYAN (Armenia) said that Europe was in the grip of a financial crisis which had caused great hardship and had ramifications for the whole continent. In some places there had been political as well as economic consequences.

The Assembly bore a responsibility to voters, and politicians needed to bring in protective measures to stop the recurrence of economic problems. The Assembly had tried to draw lessons from the crisis and many reports had been produced at the instigation of the Social, Health and Family Affairs Committee. In particular, reports by Mr Omtzigt, Mr Van der Maelen and Mr Pleskachevskiy had analysed the situation, looking at state debt, taxation and the shadow economy.

The report currently under debate was one in a series intended to draw lessons from the crisis and put into place protective measures. The aim was not to impose a tax but to restore social justice. Countries had tried to fight the crisis using taxpayers’ contributions but this might not have been fair. Tax revenues had been used to bail out the banks rather than for humanitarian purposes. The financial sector now had a higher turnover than the real economy, and it was growing exponentially. But the whole economy had paid for the crisis while the institutions most responsible for it had not only come out unscathed but had even benefited.

It was vital to take action. The European Commission and the European Parliament had passed proposals which would be useful in damping down high-risk transactions. This would have a domino affect and take the risk out of normal transactions.

The committee had heard from Professor Schäfer of the German Strategic Research Centre and had received submissions from many experts. Some colleagues were concerned that a financial transactions tax would be a burden and that businesses would move elsewhere. These experts had dispelled the committee’s fears. The financial transactions tax would have a safety catch to prevent relocation: it would be very difficult for European financial institutions to relocate.

She urged the Assembly that before talking the proposal down it should look closely at the European Commission proposal. Ten countries had already agreed to pioneer the scheme and some other countries already had a version of the financial transactions tax. Those who created risk in the economy needed to pay for it.

THE PRESIDENT – Thank you Ms Naghdalyan. You have three and a half minutes remaining.

In the debate I call first Lord Tomlinson, who will speak on behalf of the Socialist Group.

Lord TOMLINSON (United Kingdom) – May I first congratulate the rapporteur on a report with very good aspirational views which also recognises some of the difficulties in some of the prescriptions that she makes? I certainly agree with her when she says that the main purpose of this report is the restoration of social justice and, as she herself said, this is a very small tax that is being proposed. In many ways, it is too small to deal with the very large problem of not only the restoration of social justice, but the creation of it in parts of our European economy that do not have it in the first place.

Many, although not all, of the members of the Socialist Group support a financial transactions tax, as do the European Commission and the European Parliament. There is the problem that we have no common view as to what a financial transactions tax is or should be. It is widely felt that the United Kingdom rejects a financial transactions tax, but it already has one – it is called stamp duty on share transaction turnovers. In the United Kingdom that tax raises a total of 0.3% of GDP. If anyone thinks that we are going to restore social justice on 0.3% of GDP, they are living in a different world from the one in which I am living.

We are all agreed that financial markets, especially investment banking, have been highly irresponsible, speculative and self-serving in relation to the creation of trading that maximises bonuses for the bankers but was a major causal factor in the economic crisis. However, we also have to take due note of appendix 1 of the extremely good report from the OECD that we had earlier this year. It looked at the pros and cons of the tax and made the point that there are more areas of question than there are areas that can be accepted automatically. For example, it pointed out that a financial transactions tax would have an effect on turnover and liquidity. It would have a detrimental effect on the displacement of financial activity unless everybody does it. It would increase the cost of capital and investment at a time when we want to encourage more capital and more investment. Of course, it would also have an effect on asset prices.

Having said all that, such a tax needs to be considered. If we are to fulfil the main purpose of the report, we have to recognise that in order to restore social justice we need not just a new resource, but new policies. We need policies to stimulate growth; policies to create new wealth and new jobs; and policies that reform our labour markets. Then, with the wealth created by new jobs, we can finance other aspects of social justice, such as the needs of children and young people, health, housing, education, care of the elderly and solidarity with the rest of the world.

THE PRESIDENT – Thank you, Lord Tomlinson. I call Mr Hancock, who will speak on behalf of the Alliance of Liberals and Democrats for Europe.

Mr HANCOCK (United Kingdom) – First, may I explain that I am speaking on behalf of the majority of my group, but a significant number of members have strong reservations about this issue and some will vote against the report. That is the balancing act that I need to perform, and rightly so. Like Lord Tomlinson, I congratulate the rapporteur on her tenacity and on having stuck with this in the face of some fairly rabid opposition at times. I also congratulate her on her advancement in her own parliament, where she has become deputy speaker. Regrettably, of course, that means that she will leave our Assembly, and on behalf of those who have been lucky enough to know her, I wish her all the very best for the future.

With regard to the report, elected members in this Chamber bring to the debates their own personal experience of the crises we face. Many of them have been subject to terrorist attacks, wars and all the normal abuses we discuss time and again, but none of us in this Chamber was elected during a crisis that affects so many people, and not only across Europe, but across the world.

One of this institution’s fundamental roles is to try to redress what has happened on behalf of those who are not normally considered by financial institutions when they make decisions. We undoubtedly have an obligation to even out the account. Europe’s banks and financial institutions were bailed out to a substantial degree and continue to exist because of the generosity of member states and their taxpayers. The proposal is an attempt to redress the balance by saying that we are not deaf to the issues affecting people or to the loud roar demanding social justice, which comes from the people we all represent.

I am not as pessimistic as my colleague, Lord Tomlinson, but I agree that this will not solve the problem of inequality overnight. It is a small step, but it is a big step in the right direction. That is my initial thought and why I think the report is worth supporting. There will be many excuses for ignoring the report and many reasons why governments will choose not to ratify it or work towards its essence, but the people we represent are demanding redress and payback from those who got us into this mess and who used us to get them out of it. We seem to have been forgotten by those institutions. The report speaks up for the unheard people of Europe, and that is why we should support it.

THE PRESIDENT – Thank you, Mr Hancock. I next call Mr Chope, who will speak on behalf of the European Democrat Group.

Mr CHOPE (United Kingdom) – The European Democrat Group is unanimously against the report. We instinctively believe that high taxes are not the solution to the world’s current economic problems and that a financial transactions tax, if implemented, would contribute to the global recession, rather than helping to solve it.

What surprises me is that that point is made by the rapporteur in the body of the report but is not reflected in the conclusions. Paragraph 17 states that “such a tax could yield about €57 billion a year… that would be divided between the European Union and the member states. By the Commission’s own estimates, the intensity of market trading in shares and bonds could decrease by 15% and for derivatives by 75%”. Paragraph 20 states that 80% of all those transactions take place in London, so it is hardly surprising that a reduction in those transactions would have a dire effect on the British economy. That is recognised in paragraph 17, which states that across Europe as a whole there would be a reduction of about 0.3% in GDP. Nearly all that reduction would be in the United Kingdom, so it is hardly surprising that the British Government and members of the United Kingdom Parliament, with the obvious exception of Mike Hancock, think that a financial transactions tax, as currently proposed, is ill-conceived and would be counterproductive.

Paragraph 9 refers to the UNITAID initiative launched in 2006 as a way of encouraging taxes on airplane tickets to be deployed in part to help third-world countries, which I think is an excellent idea, but it is a voluntary tax and it is up to each country to decide what it wants to do.

The European Democrat Group thinks that the proposal is ill-conceived and self-contradictory, would be counterproductive and that we should be looking to give power to each individual country to decide issues of tax for themselves. In the United Kingdom, stamp duty on land transactions is now resulting in a further depression of the housing market because people cannot afford to move because of the size of the stamp duty bill that they would have to pay when purchasing the property they wish to move to.

THE PRESIDENT – Thank you, Mr Chope. I call Mr Villumsen, who will speak on behalf of the Group of the Unified European Left.

Mr VILLUMSEN (Denmark) – I thank the rapporteur for the report. The introduction of a financial transactions tax is not only a way to restore social justice; it is most urgent to prevent a new financial crisis. The current crisis was created in the financial markets, and it has made millions of Europeans poor and unemployed. Frankly, the financial markets, as they are today, are a threat to our economies and societies. We are told daily about the gut feelings of the financial markets, and then the rest of the economy must adjust according to this rapid feeling, but who are those markets? Who are they to rule the world, and why should unelected people control so many things? We need to reverse that. Democracy and the rule of law should make the decisions in our societies. The financial markets have no right to be our masters and when that has been allowed by deregulation, the result has been catastrophic. The introduction of a financial tax is therefore not only a just and wise decision, but the only economically responsible thing to do.

Of course, such an approach will not be popular with the financial sector or among the speculators, but can it be true that when I buy an apple in Denmark, I pay 25% in VAT but when someone speculates in the financial markets they pay 0% in tax? If I buy an apple, it will do me good – as we say in Denmark, an apple a day keeps the doctor away. However, 1 000 transactions a minute do not help the economy – they are a threat to the economy. We need real investment in production and welfare, we need real jobs and we need to put an end to the destructive speculation that has caused the crisis. The report has the support of the Group of the Unified European Left and I hope that it has the support of the Assembly, too.

THE PRESIDENT – Thank you, Mr Villumsen. Does the rapporteur wish to respond? That is not the case. Mr Mendes Bota is not present, so I give the floor to Mr Recordon.

Mr RECORDON (Switzerland) intervened in the debate both as a socialist and a Swiss national. Switzerland was not known for being in favour of the taxation of financial services, but he would surprise the Assembly by doing just that. He agreed with the thrust of the report and saw a good case for differentiating between different types of transactions. It was prudent, in his mind, to focus taxation on the sorts of automated trading which resulted in numerous transactions taking place at high speed which harmed the financial markets, as well as the institutions concerned. It was not just James Tobin who had advocated a tax on financial transactions, and the committee’s expert, Professor Schäfer, had demonstrated that forms of such a tax could generate significant revenue. He assured the representatives of the EDG group that their fears for the financial markets would be unfounded, based on his experience as the administrator of one of Switzerland’s largest banks.

THE PRESIDENT – Thank you, Mr Recordon. The next speaker is Mr David Davies.

Mr David DAVIES (United Kingdom) – I must join my colleagues in saying that I oppose the report and the suggestions contained in it. First, I do not accept for one moment that it was entirely the banks that were to blame for the financial crisis. If anyone looks at the figures carefully, one can see that although the banks had received a fair bit of taxpayers’ money – about £100 billion in the UK – it was successive governments of both left and right who made the problem worse, first by encouraging banks to lend large amounts of money by deliberately keeping down interest rates and, secondly, by not regulating properly. Governments were obsessed with the idea of creating a false boom in order to convince people that the economy was doing better than it was, and at the same time overspending by vast amounts of money. That overspending continues today. Politicians are spending now in order to win elections and are allowing future generations to pick up the costs. That is precisely why we have been unable to deal with many of the problems caused by the financial crisis.

Secondly, as my colleague Mr Chope has already said, such a provision would impact massively on the United Kingdom and not on other countries in the European Union, which is totally unfair on Britain. Why not have a tax on wine that will affect French wine producers? Why not have a tax on motor vehicle manufacture that will affect the German industry? We do not do that because it will have a significant impact on those countries. The UK receives 10% of its revenue –about £50 billion – from the financial services industry and it would be a disaster for us if we were to lose some of that money. That was precisely what happened the last time a financial transactions tax was tried in Sweden. They had to stop it in the end because they noticed that all that happened was that people simply moved their operations abroad. That is what would happen if we tried to introduce such a provision in the European Union.

Finally, as for the question of helping the world’s poorest, a financial transactions tax would mean that the banks were less able to lend money to support businesses and home buyers. That would have an effect on the poorest in our countries. As for the poorest in other countries, I do not know what the EU is doing but Britain is aiming to give 0.7% of its GDP in aid to foreign counties and I personally think that is far too much. I can well remember having a meal once in the poorest country in Africa and when I came out of the hotel there was a long line of Mercedes Benz sports cars waiting to convey the ministers and parliamentarians back to their homes. I cannot afford a Mercedes Benz sports car on my wages as a British MP, so how can countries that receive billions of pounds of UK aid have a better lifestyle than those in the countries that are giving it? The report is not about social justice; it is about socialist injustice. That is why I will not support it.

THE PRESIDENT – Thank you, Mr Davies. The next speaker is Mr Kayatürk.

Mr KAYATÜRK (Turkey) – I thank the rapporteur and wish her success in her new role. I believe that a tax on financial transactions would be counterproductive in overcoming the economic crisis, and would therefore not bring social justice. First, the reasons for the European economic crisis should be accurately diagnosed. Unlike the 2007 US financial crisis, the European crisis is about lending money to some overrated borrowers. The same would have happened even if there was a tax on financial transactions.

Would levying such a tax solve that Europe-wide systemic error, or would it lead to unexpected results? It is a known fact that the European Central Bank’s refinancing operation did not make the financial sector lend more money to the real sector. In fact, in this volatile environment of distrust, a tax imposed on financial transactions would sever the already weakened links between the financial and real sectors. That is why the ECB has already announced an outright monetary purchase programme.

I believe that Turkey’s experiences can offer some valuable insight into how to tackle these problems. In 2001 the unregulated banking sector, coupled with high budget deficits, resulted in the worst economic crisis that Turkey has ever faced. The result was a loss of jobs and social chaos. Turkey decisively applied a reform programme focusing on the regulation of the banking sector and the reduction of inflation. Our banking system has been safe and sound due to these regulations for the past 10 years, surviving the global financial crisis. Today the Turkish banking system and its economy are performing more successfully than many other national economies.

In conclusion, the solution to the economic crisis and the way to restore social justice is not levying taxes but establishing functional institutions that will prevent irrational exuberance from infecting the free market.

THE PRESIDENT – Thank you. I call Mr Giaretta.

Mr GIARETTA (Italy) said that the widespread crisis was continuing to act as a brake on growth. Its origins lay in a dysfunctional financial system; extreme deregulation had created the instability. The gravity of the distortion was obvious: at the end of the 1980s derivatives had accounted for 5% of global GDP, whereas now they were 10 times global GDP. Short-term speculation ought to be held in check. Resources should be freed up to offset the burden placed on public finances by market distortion and speculation. High-frequency trading had been the chief culprit. Those suffering were traditional investors such as pension funds, insurers and individual investors, even though as a rule their portfolios were stable. There were examples of taxes on financial transactions already in operation: the United Kingdom imposed a stamp duty of 0.5% on share trading. It was set at this low level in order to discourage tax avoidance or moving to other tax regimes. It was vital to promote trading in the real economy rather than speculation.

Paul Krugman had said that problems had arisen through dependence on short-term finance. A tax on financial transactions would reduce this dependence, and would have made the present crisis less likely. Were the Assembly to decide to adopt this idea, it would come into line with the European Union and other institutions, and it would provide a impulse to governments to encourage them to take the necessary decisions.

THE PRESIDENT – Thank you. I call Mr McNamara

Mr McNAMARA (Ireland) – I commend the rapporteur on her timely report. The financial sector was a major cause of the crisis that besets many of our member states, including my own. The financial sector has received over €4 trillion in taxpayers’ money in recent years across Europe. Ireland is in a different kind of bail-out from Spain, not because of the failure of its government to adhere to the stability and growth pact contained in the Maastricht Treaty and now reinforced in the fiscal stability treaty, nor because of the profligacy described by Mr Davies, but because of the recklessness of the financial sector in Ireland. The taxpayers’ money being paid out by Europe is now going into the financial sector, directly in the case of Spain and indirectly in Ireland.

Since the financial crisis began with the collapse of Lehman Brothers four years ago, the total injection into Irish banks alone amounts to €64 billion, which broadly matches the size of the troika bail-out, which is €67.2 billion. In those circumstances it is hardly unreasonable to expect that the financial sector starts to make a fair contribution to public finances. As the title of the report suggests, it is a matter of restoring social justice.

I believe that across Europe we are increasingly facing a stark choice between government of the markets, by the markets and for the markets or government of the people, for the benefit of the people and by their democratically elected representatives. For that reason, the Irish Labour Party, the smaller party in the Irish inter-party government, supports a low-rate financial transactions tax in principle. Nevertheless, the Irish Minister for Finance stated at the ECOFIN meeting in June that the proposals being made are not acceptable to us, particularly if they are applied to fewer than 27 countries. This is based on the rationale recently reiterated by our Taoiseach, or Prime Minister, that the risk of the activities in financial services moving from Ireland to other centres, particularly London if the UK does not opt in, is quite high. That rationale is in line with the findings contained in the paper prepared by the Irish Central Bank and the Irish Economic and Social Research Institute following a request from the Minister for Finance.

Back in June, however, the minister also told his fellow ministers in Luxembourg that Ireland would look in detail at any proposals that are developed. I welcome that, because, as I said, the Irish Labour Party is in favour of a financial transactions tax in principle, and because in May, since the report that I mentioned was commissioned, the text adopted by our colleagues in the European Parliament adds to the Commission proposals an issuance principle whereby financial institutions located outside the European Union would also be obliged to pay the financial transactions tax if they traded securities or derivatives originally issued within the European Union. For example, shares in a French company originally issued within France and traded between a Hong Kong institution and one in the US would have to pay the tax. The residence principle proposed by the Commission is also kept, which would mean that shares and indeed derivatives – it is important to bear in mind that derivatives are also captured by the financial transactions tax – that originated outside the EU and were subsequently traded by at least one institution within the Union would be caught. I therefore hope that Ireland will be able to participate in enhanced co-operation in future.

THE PRESIDENT – Thank you. I remind everyone to please stay within the three-minute limit, because there are a lot of speakers on this report. I call Mr O’Reilly.

Mr O'REILLY (Ireland) – I welcome this debate and congratulate the rapporteur on the quality of her report, although I do not agree with its ultimate conclusions in its present form and will indicate that at the voting stage. I congratulate her on its thoroughness and on her work.

Ireland’s position on the financial transactions tax is straightforward: we believe that it would best be applied on a wide international basis, to include the major financial centres of the world. We would prefer it to be introduced on an EU-wide basis. Otherwise there is a risk of leakage from particular centres to others that do not enforce it. That is a huge issue. My colleague, Mr McNamara, argued for the principles behind the tax. Nobody disputes that there must be responsibility placed on the financial services sector and banks, given their mistakes. That thesis is not questioned; it is the practical implementation that is at issue. The tax would need to be applied on an international and comprehensive basis. Otherwise, there will be a gravitation of activity to areas that do not apply the tax.

In Ireland, the financial services sector represents 10% of gross domestic product, hence the concern. We are concerned about the Commission’s projections that a financial transactions tax could reduce EU growth and raise the cost of financial products for ordinary non-financial companies. That, too, is a concern that we must address. These are grand principles, but we have to live with day-to-day economic realities, too.

We could not have a double tax on financial transactions. In the Republic of Ireland, we already have 1% stamp duty on share transactions in incorporated Irish firms. We would have to drop that, with implications for our economy. The new financial transactions tax would be payable to the Commission on an EU basis, so there are implications that merit consideration. Those are the practical considerations. We are not against the financial sector making a fair contribution. Our recent legislation provides for a surcharge on the banks, and we already have stamp duty.

There is a suggestion that we might establish a two-speed Europe, with enhanced co-operation from the nine countries in favour of the measure. I utterly condemn that concept, because that would have implications for the euro and damage international finances. We need to go back to the drawing board and get a form of taxation that countries will completely buy into internationally; otherwise, the tax simply will not work in practice.

THE PRESIDENT (Translation) – Thank you, Mr O’Reilly. The next speaker is Mr Gutiérrez.

Mr GUTIÉRREZ (Spain) congratulated the rapporteur on a clear and concise report, which he intended to support. Financial markets were an excessively large component of the world economy. Most growth in those markets had been achieved through speculation and very short-term trading, which was not productive and resulted in market distortions. The lack of regulation of the financial sector was an anomaly in the economy. The real economy constituted the means of payment in goods and services, and speculation and avarice could not be allowed to win the day. The crisis had had unprecedented social repercussions; not since the Second World War had people faced such conditions. Ordinary people were suffering, and equality, solidarity and social justice had been put to one side. It seemed that no one was to be held responsible for this crisis.

A tax on financial transactions would not be a definitive solution, but it would be a step forward. However, it depended on consensus. This was particularly relevant to Europe, where the highest number of tax havens were located. This was not just an economic and social crisis but a political one, too. More people were turning their back on political institutions. That very week in the Assembly’s sitting many interesting meetings had been held and many interesting reports had been considered, but they had not reflected the priorities of people outside this Assembly. Erasmus scholarships had done more for Europe than either the European Union or the European Commission. The people of Europe were the most important consideration, and must be part of the political agenda of the Council of Europe. He intended to vote in favour of the report.

THE PRESIDENT (Translation) – Thank you, Mr Gutiérrez. The next speaker is Sir Roger Gale.

Sir Roger GALE (United Kingdom) – I wish the rapporteur much greater success in her future post and career than I can wish her with regard to this report, which I oppose. It is highly questionable whether imposing an additional burden on wealth-creating individuals and financial services institutions will have anything other than a damaging effect. With a cost of 93 centimes for every €1 raised, a financial transactions tax is simply not a risk worth taking.

It is also highly questionable whether all, or even any, of the pitiful sum that an FTT would raise would really reach those for whom it is intended. It is much more likely to be used to bail out failing economies closer to home. Even the Commission has conceded that there is no consensus within EU27 on a financial transactions tax. The reason is clear: unless such a tax is imposed globally, including in the USA and in the Asian markets, where there is no support for such a measure, the obvious net result would be the relocation of business from the EU to countries not applying the tax.

There is already a flight of business from failing eurozone countries to non-eurozone countries, and, because of President Hollande’s taxation proposals, relocation from Paris to, for example, London. The proposals that we are considering would drive business away from Europe to tax havens. That would worsen the crisis in the eurozone, and the measure would fail to deliver the restoration of social justice that the report claims to wish to promote. In her explanatory memorandum, in paragraph 21, the rapporteur suggests that “The eurozone is seen as a realistic starting point for building a coalition of states willing to introduce this multi-state tax arrangement.” That is like suggesting, without a global agreement, a shift from left-hand driving to right-hand driving by easy stages – and just as dangerous.

THE PRESIDENT (Translation) – Thank you, Sir Roger Gale. The next speaker is Mr Reiss.

Mr REISS (France) said that democracies had been shaken by the economic and financial crisis for the last four years. The response had entailed swingeing austerity programmes, but the responsible attitude of governments had not been matched by that of the financial sector. The financial sector was not connected to the real economy, and was returning to its practices as they had been before the crisis. States therefore needed to identify new sources of revenue. The principle of a tax on financial transactions was now widely supported, but the measure would be difficult to implement because of variable geometry. Many people had expressed the opinion that to implement such a tax across the board would entail financial risks for Europe. The British Prime Minister had denounced the idea, citing a risk of financial activity moving to countries which had not applied such a tax, and a risk of job losses. This was an understandable attitude, as London was the location of 80% of financial transactions in Europe. It was the UK, however, which had introduced one of the oldest forms of tax on transactions, namely stamp duty. It was necessary to identify ways of financing countries’ debt which would not weigh heavily on the population. This would be difficult to design, but all had to shoulder responsibility. He intended to support the report. One voice in favour of such a measure had been Mr Sarkozy, who had said such a tax was both technically possible and morally unavoidable.

THE PRESIDENT – Thank you, Mr Reiss. I call Mr Hanson.

Mr HANSON (Estonia) – Dear colleagues, I wish to thank Ms Naghdalyan for her timely report on an important subject. As we have heard, the voices advocating a financial transactions tax, which has been practised for some time in a number of states in one form or another, are increasing in number. So, too, is the risk taken through financial transactions. As the number of EU states considering such a tax is increasing, there is a need for so-called “enhanced co-operation” in this field, and not only among EU states. There is a need for an impact assessment examining the possible economic consequences of the introduction of this tax. Evasive actions, distortions and transfers to other jurisdictions are to be avoided or at least minimised.

I agree with the rapporteur that a financial transactions tax must cover derivative financial instruments, which cause a higher risk and are used mostly for quick deals or financial speculations, rather than being levied on transactions with more traditional securities such as shares and pension fund equity. We know that 85% of financial transactions are transfers between financial institutions. They are mostly not connected with financing real economic activities and may cause fluctuations in price, which influence financial stability. We must prevent the taxation of transactions involving long-term investment instruments, the aims of which are to encourage saving.

We must not call the financial transactions tax a punishment of financial institutions for causing the financial crisis. Instead, we must see it as an opportunity to collect resources into the stabilisation fund for our financial system and to strengthen the fiscal positions of our countries. That is why we are in favour of starting enhanced co-operation to address these issues.

THE PRESIDENT – Thank you, Mr Hanson. I call Mr Rouquet.

Mr ROUQUET (France) said that 40 years after Mr Tobin had proposed it, a financial transactions tax might finally happen in Europe. The European Commission proposal contained many positive features and covered a wide range of instruments and operators. It was based on three considerations: first, that the financial sector makes an appropriate contribution to society according to its means; secondly, to limit undesirable financial activity; and thirdly, for states to maximise their income in an innovative way.

A financial transactions tax should rein in high frequency trading. However, other activities such as pension funds were long-term investments and it was necessary to take account of this.

The European Commission proposal did not deal with how the revenue was to be spent. It should be ring-fenced in order to fund education, health, the environment and renewable energy. Even with the involvement of only 12 countries, the tax should be established quickly in order to reassure taxpayers that they were not the only ones paying for the economic crisis. If there was no action it would be a danger to democracy, opening the way for extremists.

THE PRESIDENT – Thank you, Mr Rouquet. I call Mr Phelan.

Mr PHELAN (Ireland) – I think I am in the minority here. I find myself in the unusual position for an Irish politician of agreeing with the Conservative Party contributors, thus far. I rise to oppose the report, although I bear no ill will towards the rapporteur. This is a timely debate, and a number of points have been raised. Let me pick up on the final point made by the previous speaker, which was that taxpayers across Europe have bailed out financial institutions. It is certainly morally undesirable that taxpayers across the world would have to reach into their pockets to bail out failed financial institutions – it happened in Ireland, but it should not have. Decisions were made by the previous government that were highly undesirable and exposed the taxpayer to billions of euros of investment in failed financial institutions.

However, there is a problem with the financial transactions tax. Most of its supporters use the analogy of a safety net, but if we build a safety net comprising moneys collected from a financial transactions tax, we may rest assured that we will institutionalise future failure. More banks will fail, because they will know that the safety net is there and people will sail closer to the wind. Amazingly, the report and previous documentation from the European Commission admit that the introduction of this tax will raise less money than will be lost in other taxation, as a result of depression in the European Union and across the world. It is incredible that we would seek to support a tax that would do something like that.

There is a notion that this tax will reduce volatility. This tax will reduce the number of trades but increase the number of large trades. It will reduce the number of smaller, less volatile ones and increase the number of larger, more volatile ones, which will cause difficulty.

The other argument is about incidence – who will pay it? Corporations do not ever pay tax. The people who pay the taxes imposed on corporations are the shareholders through reduced dividends, employees through reduced wages and consumers through increased costs of goods and services. So the notion, with which we all agree, that this tax would be getting the bankers to pay does not make sense.

The report appeals to three basic needs. There is the economic need that, as I have already outlined, does not make sense. There is the political need, with politicians feeling that they need to do something in reaction to this particular situation, and obviously there is a European political need at the moment, because it would be a source of funding for the Commission independent of governments. Finally, there is a social need. However, as I have said, ultimately it would be individuals and not corporations who would pay it.

THE PRESIDENT – Thank you, Mr Phelan. I call Mr Triantafyllos.

Mr TRIANTAFYLLOS (Greece) – First, I congratulate the rapporteur on her report. I also wish to express my joy at participating for the first time in the proceedings of the Parliamentary Assembly of Council of Europe.

It is common knowledge that Greece is going through a deep economic and social crisis. Many people find themselves in a very difficult position due to financial problems. Recession deepens and unemployment rises. At the same time, no investment is taking place due to lack of liquidity. Social benefits have been dramatically reduced, affecting the most vulnerable population groups.

The crisis does not just involve Greece. Many countries, not only in southern Europe but all over Europe, face a bleak new reality. It is undeniable that new tools are needed to deal with the new issues arising. Everyone knows that the proposed tax is not a solution on its own. It is not adequate enough to restore social justice, but it is a positive step in the right direction, a major link in the chain. Taxpayers and national private and public sectors should not be the only ones who pay for the crisis.

The imposition of a tax on all financial transactions would bring in significant resources that could be used to promote development, create jobs and meet social needs. The effort to decrease financial instability and shift resources out of the bloated international financial sector and into the real economy would also be enhanced. The proposal suggested today would require international and transnational co-operation. Furthermore, the implementation of this tax is also a matter of justice, and a matter of rebalancing the democratic decision-making process on the one hand and the international financial markets and transactions on the other. In other words, the aim is to create a new framework of clear, transparent and democratic regulation of the markets, which will pass over national borders. To this end, international and intergovernmental organisations must play a very important role by addressing the new inequalities and promoting a new strategy for growth, jobs and a new modern welfare state.

THE PRESIDENT – Thank you, Mr Triantafyllos. I call Ms Andersen.

Ms ANDERSEN (Norway) – I congratulate the rapporteur on her important work on a very important issue. I have been listening to the debate and comparing it to the other debates that we have had this week, for instance the debate that we had when the Secretary-General of OECD was here. He said that had we known a couple of years ago what economic problems we would face, we would have done something. Well, those of us who wanted to know knew that this was going to happen some day, because the financial and banking sectors have no responsibility. They can speculate and put the economies of families, companies and countries at stake, with no risk to themselves. We knew and we should have done something about it.

This tax is something that we could do. I have listened to colleagues saying that if such and such a thing is not in place we cannot do anything, but we have to start somewhere. We have to start to do the right things, and we have to do all the other things as well. Otherwise, we can stop making all these speeches about social rights and human rights because they will not be possible if we allow the financial sector, and those who speculate with all our common money and our common future, to go on as they have.

I challenge colleagues who say that we cannot do this. What will they do to stop financial crises happening again? People say that we should do something about it, but not this and not right now. I suspect that they do not actually want to do anything about it: they want the free market economy to continue because they know that it is the ordinary people who have to pay the bill every time things go wrong, and they do go wrong.

We must also deal with tax havens. We have to stop them. Every country has to take responsibility for that, because if we do not problems will continue to occur. I thank the rapporteur for her important work: now let us go home and do ours.

THE PRESIDENT – Thank you, Ms Andersen. I call Mr Renato Farina.

Mr R. FARINA (Italy) praised the emphasis the rapporteur had put on the purpose of the scheme, social justice, rather than the means, a tax. The question was not about a Tobin tax but about states regaining their sovereignty. Two hundred years ago Thomas Jefferson had said that the banking powers were more dangerous than armies. It was time to put the state above the financial sector.

A Tobin tax was seen as a punitive measure, but it would prevent activities which ought to be prevented ex ante. It was time to return to the letter and spirit of the old banking laws such as Glass-Steagall. It was necessary to purify the system: mercantilism was a sickness of the market. The financial sector should be treated like nuclear weapons and there needed to be multilateral agreements to reduce the use of derivatives which were like warheads. It was time to return the emphasis to the values of the village, the steeple, and the family.

THE PRESIDENT – Thank you, Mr Farina. The next speaker is Ms Fiala.

Ms FIALA (Switzerland) – I first want to apologise to my dear friend, because I am somewhat astonished that we are discussing a financial transactions tax in the Council of Europe. First, we all know that we try to concentrate on human rights, democracy and the rule of law. Secondly, and more importantly, the G20, the European Union and the Organisation for Economic Co-operation and Development are opposed to such a tax, and there must be a reason for that.

Theoretically, we can of course discuss taxation on anything – energy, income, alcohol or the environment – but the important question is whether a financial transactions tax would strengthen or weaken the countries that are suffering today. The important question is whether introducing it could stop speculation and reinstall social justice.

In Switzerland we have a stamp duty, a stamp tax of 15 base points on all buying and selling of shares on the stock exchange. As a result, we have lost around 20% – up to 30%, if you believe the experts – of our trading volume. Today, most banks trade via London or New York. Never forget that it is not the speculator who pays the bill, but the end consumer, such as pension funds.

The proposal could work if such a tax was imposed worldwide. Otherwise, it would be like imposing a tax on carbon dioxide without including it in the Kyoto Protocol. You can be sure that the United States and Asia will never agree to a financial transactions tax as it is now proposed. That is why I think it would be wise to vote against this report. We should not weaken the financial institutions of the member states that have to compete against the United States and Asia. Yes, we have to do something, but if we want to stop speculation we must change banking laws.

THE PRESIDENT – Thank you, Ms Fiala. I next call Ms Tzakri.

Ms TZAKRI (Greece) – Dear colleagues, it is evident that in the past three decades capitalism, or free markets as we usually call it, have won all the major political and economic battles and managed to build a system with free and unrestricted transactions that added to prosperity but also created many crises. It is mostly taxpayers who have paid for the crisis, and national economies have struggled under the weight of the destruction that usually occurs following rapid disinvestment. But there is another problem that hurts the core of real production, the real economy: the possibility of investing in derivatives and shares but not in real production. Capital can now enter and exit a country or region in seconds and spin around the world looking for bargains and profits without committing itself to a plan or project.

It is also evident that while the real economy, the production of goods and the income of citizens is under heavy taxation, especially in Europe, capital markets are under-taxed or not taxed at all. That trend is not only a matter of social justice or measures that governments can use; it is a matter of risk exaggeration and the excessive risk that capital markets usually take when they are provided with the possibility. That is definitely wrong, and we have to change the situation, not only for re-establishing social justice, but for providing a real economy and real production with the necessary capital and commitment to overcome the world economic crisis. Therefore, we need to enhance real production and a system of profit earning through shares that does not disturb the real economy or real production.

The Parliamentary Assembly’s report, which I support, states that nowadays there is a propensity for excessive risk-taking and speculation as well as distortions in the playing field due to the under-taxation of many financial services and goods. It is also right to say that a financial transactions tax would help to tackle tax evasion in the financial sector, improve public finances and restore social justice through an innovative approach to financing and solidarity. From my point of view, the new tax would add a minimum level of morality to the capital markets by enhancing the commitment of capital to the real economy and real production.

The new tax will be a sure disincentive for capital to behave like a speculative instrument and a motive to further integration with real production. It will also be a defence against the world economic crisis and a new pool of tax income for cash-strapped governments. For all those reasons, I will vote for the report and hope that it will improve social justice and restore trust to capital markets as part of real economies.

THE PRESIDENT – Thank you, Ms Tzakri. The next speaker is Mr Tilson, Observer from Canada.

Mr TILSON (Observer from Canada) – Debates about financial transactions taxes, such as the one we are having this morning, have emerged recently in response to the global financial crisis. The Canadian Government is opposed to the introduction of a global or domestic financial transactions tax for several reasons. First, such a tax could disadvantage the Canadian financial sector, and the jobs it provides, and lead to distortions in global markets. Secondly, Canada has concerns about the administrative complexities and inefficiencies associated with such a tax. Moreover, without the universal imposition of a financial transaction tax, some jurisdictions could benefit from non co-operation as entities engage in what is sometimes known as jurisdiction shopping. For example, it was found that the implementation of a securities transaction tax in Sweden resulted in a massive migration of trading in Swedish stocks from Stockholm to London. Finally, it is important to note that Canada’s position is in line with that of the United States, the United Kingdom, Australia, Turkey, Mexico and China. I am therefore opposed to the draft resolution.

Instead, I believe that the resolution should place greater emphasis on the enhanced regulation of the financial sector. Canada’s financial system continues to be recognised as one of the soundest in the world, thanks to our robust and responsive regulatory system. To maintain the strength of our financial services sector the Government of Canada has enhanced the supervisory powers of the Financial Consumer Agency of Canada and provided the Minister of Finance with the power to approve substantial foreign acquisitions by Canadian banks. In addition, the Government of Canada is also introducing the central clearing of standardised over-the-counter derivative transactions.

(Mr Kox, Vice-President of the Assembly, took the Chair in place of Ms Woldseth.)

THE PRESIDENT – Thank you, Mr Tilson. The next speaker is Mr Boden.

Mr BODEN (Luxembourg) approved of the principles in the draft resolution, particularly in respect of the poor functioning of financial instruments. But a tax on financial transactions would not have prevented the economic crisis, nor would it address the dysfunction in the markets today. The G20 had noted disagreement among its members, in spite of the fact that some countries were co-operating on developing such a tax. The Prime Minister of Luxembourg had announced his country’s intention to abstain from any such policy as it would be anti-competitive in a country where 38% of GDP was accounted for by the financial industry. Luxembourg opted instead for a tax in the form of subscription for financial activity. It was also relevant that neither the IMF nor the OECD had recommended the introduction of a financial transactions tax.

THE PRESIDENT – Thank you, Mr Boden. Too many people have taken too much time, which means that I shall have to interrupt the debate after the next speaker. It is a matter of solidarity to stick to your time, because it allows others to participate in the debate. The last speaker in the debate will be Mr Schennach.

Mr SCHENNACH (Austria) said that the rapporteur had dug deep into the subject of the tax on financial transactions, and had demonstrated her liberal convictions. Despite those who spoke against it, this was an idea whose time had come: nine or 10 European countries would be introducing it next year. Ordinary citizens had already paid too much to bail out failed banks, and this had come at a price of reducing its expenditure on social welfare. He knew that Portugal had certainly cut the social welfare budget in order to cope with the reduction in funds available. The demise of Lehman Brothers and the Icelandic banks meant that the real economy was under-funded and this was contrary to any sense of fairness. With Germany, France, Austria and Greece introducing a tax on financial transactions other countries would surely follow suit and he therefore welcomed the report.

THE PRESIDENT – Thank you, Mr Schennach. I have decided that we will finish the list of speakers, as long as everyone sticks to their three minutes, as we are running out of time. The next speaker is Ms Auroi.

Ms AUROI (France) said that she wished to underline the point that a tax on financial transactions was only part of the solution; nonetheless it was important to note the financial contribution it would make to social justice issues. It was also significant that paragraph 8.1 of the draft resolution invited the Council and the Commission to ensure that a financial transactions tax dealt with financial services, products and actors in a comprehensive manner. Such a tax would extend the scope of the tax base and she was relieved that pension funds had been exempted.

Speculation in financial markets had been the principal cause of the crisis. Exempting the financial sector from regulation would send a bad signal. The spirit of the Tobin tax was that the proceeds should be dedicated to sustainable development and tackling climate change. This tax on financial transactions should also be earmarked for those aims. France would participate in the enhanced co-operation; she hoped others would join, but this would be a good first step.

THE PRESIDENT – Thank you. I call Mr Hunko.

Mr HUNKO (Germany) said that he would support the resolution, which was very timely. This debate had been going on for some time. The Tobin proposal dated back to 1972, and international organisations had been set up to support it and had gained significant membership even before the financial crisis. He himself had been active in ATTAC before he had been active in any political party. The debate had accelerated since the crisis of 2007-09. Financial bubbles and the decoupling of the financial markets from the real economy had been among the main causes of that crisis. Clearly a tax on financial transactions could not be the only solution, but it was an important step which the Assembly should support.

Some of the arguments put forward by those opposing the tax had been frankly irritating; he could not take seriously calls to tax French winemakers. Members should not speak from a purely national perspective, as the Assembly was an autonomous body and should simply consider whether or not the proposal had merit. Others had argued that the tax could be introduced only if it were to be introduced worldwide. If that was a precondition, nothing would ever happen. Somebody had to take the lead, and he was happy that Germany would participate in the enhanced co-operation. President Roosevelt had said that being governed by organised money could be just as bad as being governed by organised crime. This comment remained relevant given the huge pressure under which governments had been placed by financial markets.

THE PRESIDENT – Thank you. I call Mr Simms, Observer from Canada.

Mr SIMMS (Observer from Canada) – I have been intrigued by this whole debate in the past hour or so for several reasons. I would like to quote some of the people who have taken part in the debate. First off, though, I would like to say that I am an observer; I do not have the right to vote but I have the right to speak, and I thank the Parliamentary Assembly for giving me that opportunity.

First and foremost, we all suffer from what has happened since 2008. I congratulate the rapporteur on her report. I strongly suspect that I would not vote in favour of it if I had the opportunity, but I would have a great deal of trepidation in not doing so. I do not speak on behalf of my own government in Canada – thank goodness that you have varying degrees of opinion allowed in this Assembly, which is why I like coming here – but, from my own point of view, the intention in the report is one that should be looked at, probably more in a broad scope than anything else.

My first problem with this tax is that if it operates in only one designated area, its accomplishments will be very few and its problems will be greater. We can only look to somewhere like Sweden, which went through this in the early 1990s. Granted, this notion that prices will eliminate some of the volatility in trading by imposing a tax like this is not genuine, because markets have a great ability to adjust. As one of my colleagues said earlier, the problems within the eurozone started with Lehman Brothers in the United States of America –we do not operate in the vacuum that we like to think that we do. The problem is that having one jurisdiction do something, as Sweden proposed in the early 1990s, allows capital to move. That is unfortunate but there is no getting around it.

Some other people, such as Mr Hancock, said that this is a step in the right direction, which I agree with, while others have said things like, “address this imbalance of the tax burden”. Here is what I like about this and what we should address: as my colleague from Canada said earlier, and as the IMF and the OECD are saying, the regulation part of the proposals should be put under a larger microscope. However, the one thing about a financial transactions tax is that the revenue that it creates is very simple. Instead of looking behind in order to make reparations, we should be looking ahead to create a cushion like we did in Canada several years ago so that, when we find ourselves under very strict austerity measures, we are able to cushion that from a social perspective. I thank you again for allowing me this opportunity.

THE PRESIDENT – Thank you. That concludes the list of speakers. I call Ms Naghdalyan, the rapporteur, to reply. You still have three and a half minutes left, madam.

Ms NAGHDALYAN (Armenia) thanked all those who had participated in the debate. Although it was often said that no one came to debates in the Assembly on Friday mornings, this important topic had attracted more than 30 participants. This proposal would be a contribution to solving one of the most difficult problems facing the world today. Of course it would not solve that problem by itself; more complex approaches were also needed to address factors including the labour market and productivity. It was imperative, however, to tackle the inequalities of the market in financial transactions. Some speakers had claimed that the tax would be detrimental to the health of the European financial sector, but the tax would apply only to speculative transactions such as derivatives and over-the-counter transactions. Such transactions were of small economic significance but nevertheless had great potential to destabilise the wider economy.

Europe retained little of its manufacturing capacity and, it seemed, imported most goods from China. The proposed mechanisms would help to shore up the real economy. Members should not be afraid of the consequences getting out of hand, and it was very unlikely that the headquarters of major financial institutions would be relocated as a result. It was possible to argue till the cows came home that total agreement was needed before implementing this measure, but someone needed to be bold and take the first step. Affecting the wallets of ordinary people was seen as normal, but it appeared that trying to affect the wallets of financial institutions was not allowed. If the problems were not tackled the situation would deteriorate. French winemakers had not been responsible for the crisis; it was necessary to punish those who had been responsible. Basel 2 and Basel 3 ensured that special funds were available to guarantee bank deposits. Sometimes to find a cure it was necessary to swallow a bitter pill. If the Assembly did not pass this resolution, she would simply rewrite it and submit it again.

THE PRESIDENT – Thank you. The speaking time limits also apply to rapporteurs; we should bear that in mind. It was very difficult to finish the speaker’s list, because people did not stick to their time limits.

Does the Chairperson of the Committee, Ms Maury Pasquier, wish to speak?

Ms MAURY PASQUIER (Switzerland) thanked the rapporteur who had become totally committed this subject and had defended the report to the utmost. This had been Ms Naghdalyan’s last report and intervention.

It was surprising to see that one political group had declared its intention to oppose the resolution without tabling any amendments to it. They had not used all of the tools at the Assembly’s disposal. A clear majority of the committee had been in favour of the resolution, and she hoped that this would be the case in the Assembly as well. A tax on financial transactions would give states a means of fulfilling their responsibilities, and give them the wherewithal to restore social justice, which was necessary for their future prospects. This topic was intimately connected with the Assembly’s values: rights could not be guaranteed without access to healthcare, jobs and prospects.

THE PRESIDENT – Thank you. The debate is closed.

The Committee on Social Affairs, Health and Sustainable Development has presented a draft resolution in Document 13017 to which no amendments have been tabled.

We will now proceed to vote on the draft resolution contained in Document 13017. The vote is open.

The draft resolution in Document 13017 is adopted, with 42 votes for, 26 against and 5 abstentions.

3. Joint debate on the consolidation and international openness of the European Higher Education Area, and governance of higher education institutions in the European Higher Education Area

THE PRESIDENT – We now come to a joint debate on two reports from the Committee on Culture, Science, Education and Media, entitled “The consolidation and international openness of the European Higher Education Area”, which is in Document 13009, and “Governance of higher education institutions in the European Higher Education Area”, which is in Document 12964 and the addendum. I remind members that speaking time is limited to three minutes. If necessary I shall interrupt the list of speakers at about 12.45 p.m. to allow time for the reply and the votes.

Each rapporteur has 13 minutes in total, which they may divide between presentation of the report and reply to the debate. I call first Mr Huseynov, Rapporteur for the Committee on Culture, Science, Education and Media.

Mr HUSEYNOV (Azerbaijan) – The problem that we are about to debate in this last part of this session is distinct from all the issues we have debated over the past few days, as this topic concerns each of us – every part of the European continent and every human in the world. When we talk about education, we are talking about the present and future of everybody, and the extent of society’s progress and improvement depends on the degree to which we perfect this area. Establishing a common European house and ensuring the unity of our countries is the foundation of our political activities, and education should be considered one of the most unifying elements.

The pioneering steps in the formation of the European Higher Education Area were taken as long ago as the mid-20th century. Three conventions – on the academic recognition of the equivalency of the diplomas granted by universities, on the education period, and on university qualifications – were signed in Paris in 1953, 1956 and 1959, and they have come to be a reliable background. Increasing efforts were made to establish a joint education area, and that process is still under way.

The number of countries joining that process, called the Bologna process since 2001 and now called the EHEA, has increased three times over, and has reached 50. New countries continually express a desire to join the process. That should be perceived as a real indication of the joint interests and activities of European countries, and other countries across the world, in the area of education.

Our world is smaller than it was 50 or 60 years ago. The borders separating countries have become more open, and political systems have undergone change. The notion of a student education area has changed in line with that process of globalisation. The Lisbon convention, signed in 1997, is a major legal document reflecting the area of unity. It related to student exchange in higher education solely in European countries. The subsequent signing of that document by countries including Australia, Canada, Israel, Kazakhstan, the United States and New Zealand – countries covering a vast geographical area – demonstrates the ongoing globalisation of higher education. I have been carrying out my activities in the field of higher education for more than 25 years, so I have been observing the unification process thoroughly.

Nevertheless, as I have been working on the report for the past two years, I have benefited from opportunities to focus more on the details of the problem. First, I acquired the resolute belief that it was an irreversible process promising a successful future. However, close observation also requires the elimination of a number of problems in order to bring about a smoother continuation of the process.

The prominent French scholar Louis Pasteur once noted that science does not have a homeland, but scientists do. In applying that aphorism to our research area – to education – we should say that the countries that joined EHEA and those that intend to join it, and the languages and nations they represent, are distinct, so that every teacher and student has his own homeland, although education has no homeland. Nonetheless, each nation has certain historically formed educational traditions, so when a country joins this common process, it is required to preserve the golden mean, organically bringing the positive sides of old traditions into conformity with the basic terms of the new process in order to ensure a precise balance.

As this is an objective directed towards the future, and given the philosophical line of the educational architecture, the idea of the EHEA calls for permanent thinking on its policy development. The constant dialogue between its member countries and the countries wishing to join the process is greatly significant. The regular organisation of the conferences of Ministers attended by the non-member countries, which intensifies the dialogue process, contributes not only to strengthening unification but to revealing and liquidating problems.

Education is also a policy – it is integral to the global situation and an important factor in ensuring countries’ development. The constant and serious support of the countries, particularly from their parliaments, is necessary for the improvement of education and the more successful progress of EHEA. In turn, the Council of Europe should strengthen its efforts on the further deepening of co-operation in this area between the parliaments of member states, thus potentially contributing to the indicated process.

In my report, I wanted to draw attention to the external dimension of the Bologna process, including the impact that developments in the EHEA have in the neighbouring regions and globally. I am convinced that EHEA should take account of developments in other parts of the world and benefit from advances elsewhere. The Bologna declaration sets itself the objective of ensuring that the European higher education system acquires worldwide attractiveness. The Bologna process’s strategy, “European higher education in a global setting”, calls on states that are part of the process to take specific measures to make the area more open internationally.

The main measures are: improving information on the EHEA; promoting European higher education to enhance its worldwide attractiveness and competitiveness; strengthening co-operation on the basis of partnership; intensifying the policy dialogue; and furthering the recognition of qualifications. I strongly believe that those aims cannot be achieved unless we reinforce international co-operation in higher education. Intergovernmental co-operation is not sufficient; the EHEA needs to evolve and gain wider political support.

An intergovernmental framework is an effective tool for rapid decision-making and the promotion of reform, but the success of its implementation lies in it being endorsed by national parliaments, higher education institutions and student associations. That is the reason why Parliamentary Assembly members should stand ready to provide all necessary political support to ensure the implementation of Bologna policies in their countries.

I wish to highlight some areas in which progress is still needed, and what parliaments and governments could and should do to consolidate the EHEA and make it more open internationally. First, we need to improve information on the EHEA. The Bologna process has a high degree of visibility outside the EHEA. It has enhanced Europe’s attractiveness as a destination for students and scholars from other parts of the world; mobility from other parts of the world towards the EHEA has increased substantially. It is also important to monitor the global perception and assessment of the Bologna process, in order to provide correct information about the EHEA and make the Bologna label better known.

My report mentioned the co-operation already taking place in the Russian-speaking area, which transcends the EHEA borders. Russia has a close relationship and strong co-operative ties with higher education systems in the central Asian states, including Kyrgyzstan, Uzbekistan and Turkmenistan, which are not members of the EHEA. Traditionally, their higher education systems have been closely connected to Russian universities, but the Bologna process puts them on the external side. So it is crucial not to construct artificial borders but to act as a bridge between these countries and the larger EHEA community, which can also initiate wider reform in higher education.

I now wish to make a few remarks about intensifying the policy dialogue. The Bologna process has had and will have a large impact on the global higher education architecture in terms not only of student mobility but of policy development. It would be useful to systematise and broaden policy dialogues that have already been initiated with non-EHEA-country governments and stakeholders on introducing higher education reform and innovation in order to exchange new ideas and share good practice.

Policy dialogue should be based on existing, well-functioning forums, such as the Bologna ministerial conferences and the Bologna policy forum, which has since 2009 been organised on the margin of the ministerial conferences. A number of non-European countries are invited to the Bologna policy forum, but that does not imply formal recognition in relation to the EHEA. The Parliamentary Assembly should act to ensure that the Council of Europe plays an active part in the Bologna process, including through the external dimension of the process, which defines co-operation with countries that are not Council of Europe member states.

THE PRESIDENT – Thank you, Mr Huseynov. You have two and a half minutes left. I call Mr Connarty to present the second report on behalf of the Committee on Culture, Science, Education and Media.

Mr CONNARTY (United Kingdom) – Thank you very much, Mr President. I am acting as a substitute rapporteur, and it is a great pleasure for me to present this report on behalf of the named rapporteur, Gvozden Srećko Flego, who has had to return to Croatia as a result of the death of its parliament’s Speaker. Without embarrassing him, I am able to do something that I take great pleasure in doing, which is to praise Mr Flego and the process by which this report was produced. Mr Flego is an excellent chairman of the Committee on Culture, Science, Education and Media, and I have the pleasure of acting as the chair of his Sub-Committee on Education, Youth and Sport. He is a great leader and a great supporter of the right of people to speak up and develop policy in all these areas. He is also, as people know, a professor of philosophy at Zagreb university and a former minister for science and technology in Croatia. He participated in the Bologna process and experienced the changes this process brought to universities. He attended the conference “Academic Freedom and Institutional Autonomy: the Role of Public Authorities” on behalf of our Organisation in Strasbourg in November 2010, and he was also part of the preparatory work for a new Committee of Ministers recommendation on this subject. So he is an ideal person to have tabled the original motion in Document 12404 to the committee to which he was appointed rapporteur in January 2011.

I say this to stress that this has not been a quick process that was done by sitting around a table talking to a few colleagues with grievances to express. Based on a report by Professor Josef Jařab of the Czech Republic, the Parliamentary Assembly adopted Recommendation 1762 in 2006 on academic freedom and university autonomy, which stressed the important role of higher education institutions and their self-governance. A detailed analysis of the governance of higher education institutions and their involvement in the European higher education area were not yet the focus of Recommendation 1762. The present report sought to complement that work and take it further.

Professor Pavel Zgaga prepared and presented to the committee in Paris on 5 March 2012 a substantial background report, which is available to those who wish to read it. He looked at university autonomy from historic concepts to modern challenges. We are very grateful for his contribution to his work. During that meeting in March, which I attended, the committee also held a hearing on education policies with the participation of Ambassador Arif Mammadov, the chair of the Council of Europe Committee of Ministers Rapporteur Group on Education, Culture, Sport, Youth and Environment, and experts including Professor Pavel Zgaga, the director of the centre for educational policy studies at the University of Ljubljana; Professor Dondelinger, co-ordinator for higher education in the Ministry of Culture, Higher Education and Research in Luxembourg; Dr Annette Peiper de Avila, senior consultant in the Section for Higher Education at UNESCO; Ms Anna Glass, secretary-general of the Magna Charta Observatory in Bologna; Ms Ligia Deca, co-ordinator of the Romanian Bologna follow-up group secretariat in Bucharest; and Mr Frank Petrikowski of the higher education unit and director-general for education and culture at the European Commission in Brussels. I give that list to stress that this was a very thorough study that allowed everyone who wished to come and give evidence to be heard. We deeply appreciate the helpful contributions by these participants, as well as those from colleagues on the committee who took part in the hearings and in the construction of this report.

Assembly members and all those interested in governance in civic society will appreciate the thorough examination and analysis carried out into all aspects of this challenging subject by looking at the explanatory memorandum and its references. I do not intend to try to rehearse all the arguments here today, although as someone from an educational background I would like to see educational debates held in the middle of the week, when everybody is here and can take part. The Bureau of this Organisation should look very seriously at putting this work, which was done in great seriousness by many participants, much higher up the agenda to give it the respect it deserves.

The document contains substantial sections, such as section 2, “Defining the governance of higher education institutions”, with reference to university autonomy and the Magna Charta Universitatum, which extends the definition to all higher education establishments, including those in the technical sphere, as well as universities. Section 3 is “Political and other influences on the autonomy of higher education institutions”. Particularly relevant in that section is the protection of higher education institutions from the influence of private finance and the need for independent academic bodies to safeguard all universities and higher education institutions from the influence of private capital.

Section 4, “General legal standards on higher education”, refers to several overarching articles, for example Article 2 of the First Protocol to the European Convention on Human Rights, and Articles 9 and 5, which guarantee the right to education, including primary, secondary and higher education in accordance with the case law of the European Court of Human Rights. Under Article 10.1 of the revised European Social Charter, parties to the Charter undertake “to grant facilities for access to higher, technical and university education, based solely on individual aptitude”. Sadly, individual countries do not always adhere to that article, because there are other influences, such as political favour or the suitability of students.

Article 13 of the Charter of Fundamental Rights of the European Union guarantees that “the arts and scientific research shall be free of constraint. Academic freedom shall be respected.” Article 14 guarantees the right to education and access to vocational and continuing training.

Other sections talk about the autonomy of higher education institutions in practice, because you cannot just philosophise, even with a professor of philosophy in the chair. You have to look at practicalities. The section includes a strong criticism of Belarus and support for the governments involved in the Bologna process who have come out very strongly against interference in academic matters in universities in member states. As you know, we have banned five chancellors from coming to the European Union.

The report also recognises the separate and not always similar demands of public policy. Section 6, “Balancing institutional autonomy and academic freedom with public policy”, has been a matter for debate for centuries. I hark back to the Enlightenment in Scotland, when people started to talk in sceptical terms in a very religious context, and great debate went on. The words of David Hume, for example, provided great sections of the American Declaration of Independence and arose from that hothouse of challenge to public policy and the right of academics to think new thoughts and develop new ideas. That was very important also to section 8 in which we considered ensuring the quality of higher education. Our conclusions are set out in the report.

Mr Flego also looked very seriously at current cases and reports that pointed out that a number of countries are travelling in a direction that is not compatible with the aspirations of the report or the committee, or even the statutes to which we are trying to adhere through this institution. I am sure that we will hear from those countries later in protest, but the reality is that we found in the case of Turkey and Ukraine substantial and recognised criticisms, set out for example in the 2012 Freedom in the World report in the case of Ukraine, and over several years in the case of Turkey, where 2 000 students are still in jail without any charge because they were caught on marches demanding free education. At least 20 academics are also locked up without charge in that country. We are prepared to defend the decision by the committee to name those countries. We have principles and we demand practice in line with them.

THE PRESIDENT – Thank you, Mr Connarty. You have three minutes remaining.

I call Ms Guţu, who will speak on behalf of the Alliance of Liberals and Democrats for Europe.

Ms GUŢU (Republic of Moldova) said that the debate was on a very important subject for many member states. Recommendation 1762 had been adopted six years earlier and it had been very useful in influencing states to improve their educational systems. The Sorbonne-Bologna process had started with four countries, the United Kingdom, France, Italy and Germany, at the instigation of Claude Allègre, the former French Education Minister.

The principles of academic freedom and recognition of qualifications had been accepted. But universities had had to implement the new regime without any extra funding and this had resulted in inevitable foot-dragging.

In 2010 the European Higher Education Area had been established with its three-cycle model of higher education. This had not been easily accepted in the Former Soviet states which had favoured the old Soviet model.

THE PRESIDENT – Thank you, Ms Guţu. I call Mr David Davies.

Mr DAVID DAVIES (United Kingdom) – I assume that we are talking about both reports and so will take them in chronological order. I welcome both very warmly. As a father of three children, all of whom are in state schools, I am completely in favour of more freedom of choice. I regret the fact that in the United Kingdom there has been a top-down mentality which means that parents are simply told where to send their children to school and, unless they are very wealthy – certainly more wealthy than a British member of parliament – they will be unable to afford to have them privately educated. I am very lucky, because the state schools my children attend are very good, but many people are not so lucky.

I absolutely welcome and applaud the fact that the UK Government has recognised that and, supporting the principles in the report, is now allowing parents in England much more choice and is enabling them to set up their own schools, which is broadly what the report is suggesting. Unfortunately, that does not apply in Wales, where there is a much more backward mentality in which the Government always knows best.

With regard to higher education, I regretted having to vote in favour of increased student tuition fees, not because I thought that the Government was wrong to do it – it had absolutely no choice – but because one of the problems is that far too many people across Europe are going to university. It is not necessary to send up to half the population – the target in the UK – to spend three or four years doing a degree that will not necessarily lead to a job afterwards. That is why I welcome the fact that the report contains more about the portability of qualifications and ensuring that they will be recognised across Europe so that people have freedom of movement.

However, I cannot support the idea that freedom of movement means some sort of right, superseding that of a national state, to grant people student visas to visit a particular country. We in the United Kingdom have seen the systematic and outrageous abuse of our student visa system. People have come to the country, often by signing up to bogus universities, and sometimes by signing up to authentic universities but then not bothering to turn up to any lessons, and then they go off to find work and basically stay in the country illegally. That is totally unacceptable. That is why that part of the report is not something that I, or anyone else from my group, can accept.

What I think is particularly important is the principle that the people who set up schools are subject to examinations to ensure that there is no discrimination on religious or any other grounds, because in part of the United Kingdom we have seen in the past a separation of communities through the education system. I very much fear that we are seeing a similar situation happening within different religious communities in other parts of the United Kingdom. Overall, however, I welcome both reports.

THE PRESIDENT – Thank you, Mr Davies. The next speaker is Ms Andersen, who speaks on behalf of the Group of the Unified European Left.

Ms ANDERSEN (Norway) – We support the resolution, the recommendation and the principles set out in the reports. To make it more possible for students to cross borders is not only very important for the quality of education and the individual’s possibilities, but a good thing for Europe and the whole world, because people will tend to get to know each other. If we make it more possible for people to cross borders to get a job, that can only be for the good. I am not at all sceptical about the students, as our colleague from the United Kingdom seems to be, because I think that they will contribute if they are allowed to do so.

What kind of higher education will we need in future? We often do not know, but we as politicians know that we must promote the kind of education we need, such as education on climate change and the needs of the environmental sector. We also need much more knowledge about how to stop social deprivation, for example. Therefore, we must co-operate with our education system to create that knowledge across borders, especially in relation to the conventions on which this Assembly’s work is based.

I would also like to mention paragraph 11.1 of the draft resolution set out in Document 12964, which refers to promoting equal access to higher education based on ability. I think that we have to underline the fact that some people are disabled but that does not mean they are unable to pursue higher education and benefit from it. We should make that possible. I underline that because I think that it could be misunderstood. I also know that in higher education there are many hindrances to our young people who have disabilities. For example, sometimes they cannot even get into the buildings because there are stairs and other things. There is also something lacking in the way the education is being given and in how exams are taken.

THE PRESIDENT – Thank you, Ms Andersen. The next speaker is Mr Volontè, who will speak on behalf of the Group of the European People’s Party.

Mr VOLONTÈ (Italy) beileved that the Committee had done an excellent job in seeking consensus and representing the views of many members of the Assembly. The governance of higher education in the European area was a subject of continuing interest, and was particularly important as a driver of economic growth. The recommendation recognised the importance of being able to compare standards between countries. Member states should not compete in terms of wages but rather on innovation. He hoped that the Assembly would not split over the amendments.

THE PRESIDENT – Thank you, Mr Volontè. The next speaker is Mr Schennach, who will speak on behalf of the Socialist Group.

Mr SCHENNACH (Austria) recalled that the freedom of the media and academia were both of crucial importance. The independence of academic staff should remain unfettered, on the basis of the model of education advocated by Alexander von Humboldt in which universal knowledge was valued. The Bologna process had changed that to some extent and he believed that not every teacher required a university education. Stefan Zweig had been able to travel the world in the 1920s without a passport, and it was this sense of absolute mobility which should be revived in European education today. He came from a central European country, where education was seen as a public good, and therefore free to all those young people who sought it. This sort of generous approach should form the basis of higher education policy in Europe.

THE PRESIDENT – Thank you, Mr Schennach. The next speaker is Ms Bakir.

Ms BAKIR (Turkey) – I was astonished to read in the addendum that in Turkey there are violations of academic freedom. As a full professor of structural mechanics who has carried out academic research and teaching in Turkish universities for 20 years, I want to declare that that allegation is incorrect. Academic freedom consists of scientific freedom, financial freedom, administrative freedom and teaching freedom, which have all become more broadly available in Turkey over the past 10 years. Higher education institutions in Turkey have complete freedom to conduct research freely and to determine who may teach, what may be taught and how it should be taught. Over the past 10 years, university scholarships have increased sixfold and universities’ budgets have increased fivefold. In 1981, Turkey had only 28 universities. Today, we have 168. The scientific research council’s budget has increased eight times in the past couple of years and I want proudly to underline the fact that 42% of all academics in Turkey are women. However, according to the European Commission, the proportion of female professors in EU member states is only 15%.

The allegation in the addendum that several scientists in Turkey are in prison on political grounds is not true. Those professors are in detention because of their possible involvement in the Ergenekon coup case linked to the deep state structure whose motive was to overthrow the government and establish an ultra-nationalist regime. The court ordered the continuation of their detention because other suspects in the case had previously absconded from Turkey to foreign countries and because the evidence could become obfuscated.

In my country, Turkey, there were military coups in 1960, 1971, 1980 and 1997. In 1960, the military overthrew the Democrat Party government, which had obtained 57% of votes in the elections, and arrested all the ministers as well as the parliamentarians. Some 107 members of the parliament were tried and given the death penalty, one of whom was my uncle, Kamil Gündeş. Like me, he was the deputy of the province of Kayseri. In 1961, the prime minister and two cabinet ministers were executed by hanging. Only last month, several generals of the Turkish army were sentenced to 20 years’ imprisonment for their involvement in the “sledgehammer” military coup plan.

Distinguished colleagues, I have told you this because I want to request you all to take the side of democracy in Turkey and support our sub-amendment, which would delete the word “Turkey” from paragraph 9 of the addendum. Thank you.

THE PRESIDENT – Thank you, Ms Bakir. The next speaker is Ms Memecan.

Ms MEMECAN (Turkey) – Inventions, innovations and social and cultural advancements are majorly owed to higher education. I congratulate the rapporteur on his points in this report, which aims to ensure the independence and free spirit of higher education institutions. Unfortunately, however, he fell into the trap that is typical in many of the reports produced here, losing the focal point and damaging the credibility of the report. The addendum names and defames two countries, Turkey and Ukraine, with totally false and irrelevant information in the case of Turkey. The addendum is a product of domestic politics and unfortunately was inserted without paying due attention to its content and lays the ground for unfair accusations about Turkey.

I take this opportunity to briefly clarify the issues and ask my colleagues here to reject Amendment 1, in which Turkey and Ukraine are singled out and defamed. Turkey actually needs praise for investing enormously in higher education, as my colleague has just explained. As an additional note, the budget of TUBITAK, the scientific research institution, has been raised eightfold, the number of techno parks has increased to 32 from two and the R&D budget has tripled in 10 years. University tuition fees have been removed to accommodate more students. No student is detained for peaceful demonstrations; they are charged only when they resort to violence.

The addendum mentions the issue of the Turkish Academy of Sciences, TUBA, which was founded in 1993 as an autonomous institution. Since its establishment TUBA has remained inactive, with only 70 full members out of a possible 900 scientists. The necessary reform of TUBA in 2011 is in line with the government’s ambitions to boost scientific research and technological innovation in Turkey. After the restructuring in 2011, TUBA now continues its activities with financial, administrative and scientific autonomy and is becoming more pluralistic and dynamic, with 150 full members and 150 associate members.

As my colleague has just explained, the addendum also mentions Professor Haberal, who has been charged over his involvement in the Ergenekon coup case. It is totally irrelevant to include this in a report entitled “Governance of Higher Education Institutions” while the court case is going on.

Turkey has aspirations and makes the necessary investments to be competitive in the higher education area in Europe. The unfair defamation in paragraph nine will only be totally counterproductive to science in Turkey and in Europe. Again, I ask my colleagues to reject Amendment 1.

THE PRESIDENT (Translation) – Thank you. I call Mr Le Déaut.

Mr LE DÉAUT (France) said that he supported both the priorities of the Council of Europe on the European Higher Education Area and the Bologna process and the modernisation of higher education in the 47 member states. A new academic context was needed to support ambitious research and the transfer of knowledge to society. The transition of students to the world of work would be aided by broader recognition of doctorates. Important factors affecting students included their financial situation and access to housing and healthcare. In France, a three-tier system for higher education had been instituted in 2002. The portability of diplomas throughout Europe was important, but the approach could not be entirely uniform because each country had its own history and culture. For example, in France, the grandes écoles operated in parallel with other higher education institutions, although the government wished to promote better co-operation between them.

Academic freedom for higher education establishments had to be guaranteed. A French law passed in 2007 had addressed the governance of higher education, including budgets, human resources, responsibility for premises and the promotion of closer links with the corporate world. University boards now comprised researchers, staff, students and representatives of the business world. The Minister for Higher Education was organising a public debate on the sector in France. He himself had been asked by the Prime Minister to draw up some ideas, and he intended to include the proposals of the rapporteurs in these.

THE PRESIDENT – Thank you. I call Mr Sudarenkov.

Mr SUDARENKOV (Russian Federation) said that while the former Soviet education system had in some ways not been good, it had been academically excellent. High-quality higher education put people on the ladder of social mobility, and was vital now in Russia. A new federal law in higher education which would take into account the Bologna process was planned. Henceforth, the baccalaureate would be the main route into higher education and degree courses would be reduced to four years. These developments were not, however, proceeding quickly. High quality was especially important for first degrees. He did not understand why the Committee’s reports had not sought to take stock of the single European Higher Education Area which was supposed to have been in operation by 2012. Turning to the amendment proposed to paragraph 6, he argued that the report’s statement on Belarus was much too hostile. Students in Belarus should not suffer for the actions of its government, and academics should not be denied visas.

THE PRESIDENT thanked Mr Sudarenkov and called Ms Mateu Pi.

Ms MATEU PI (Andorra) congratulated the authors of the reports and said that the Assembly ought to promote access to education and knowledge, which were very precious. This was a vision shared by the Sorbonne and Bologna processes. The end of the road had not been reached yet, however, and it had taken several centuries after the Enlightenment for young people to have the full benefit of access to different cultures and the ability to study in different countries. Young people should not suffer from parochialism in education. Working together on the basis of dialogue to share knowledge was vital, and the pooling of knowledge was the keystone of future prosperity. Thanks to the Lisbon Convention, young people’s qualifications could be recognised across Europe. Bringing together the systems for bachelors, masters, doctoral and “LMD” qualifications would bring benefits of wider recognition. Some stumbling blocks remained, however; these included immigration rules and regulations surrounding visas and residence permits, especially for students from outside the EU and the European Economic Area.

THE PRESIDENT said that Ms Mateus Pi had had her three minutes and called Ms Bílgehan.

Ms BĺLGEHAN (Turkey) said that these important reports asserted the principle of academic freedom, and particularly that of students. That the European Higher Education Area had been a success had been proved by Mr Flego’s report. Exchanges were now possible on the basis of common values, although some obstacles remained. These obstacles included language problems, different academic calendars and, in particular, the difficulty of obtaining visas. Some Turkish students who had been accepted on Erasmus programmes had not been able to leave the country, and a visa facilitation scheme was needed. Mr Flego’s report had drawn attention to violations of academic freedom and the independence of higher education institutions in Turkey. In 2011 the Turkish Academy of Sciences had been brought under the aegis of the Minister for Science, and was now appointed by him. This was as ridiculous as the Minister appointing the national football team. As a result, top academics had left the academy to set up their own organisation. Academics should not be imprisoned because of their views, a development which had been observed in Turkey by NGOs. She was appalled by this situation. She had recently attended an award ceremony for diplomas in Ankara, where many of the most brilliant students had been women, which was a source of great hope for the future.

THE PRESIDENT – Thank you. The next speaker is Mr McNamara.

Mr McNAMARA (Ireland) – Thank you, Mr President, for keeping the list open.

I welcome the report on the consolidation and international openness of the European Higher Education Area. I have seen at first hand the benefits of international openness in my constituency of Clare, which students come to from across Europe to learn, not just within the rigid confines of prescribed undergraduate curricula or from set texts, but by bringing the skills and knowledge that they have already acquired to the field, where they can carry out their own research to advance the sum total of human knowledge, which is surely the ultimate goal of higher education.

The first international archaeological field school in the Burren in County Clare opened in July this year. The Burren is one of the largest karst landscapes in Europe, and since last year it has been part of a unique group of world locations that form the global network of national geo-parks – a UNESCO-supported initiative. It is also one of the most archaeologically rich areas of Ireland, with a great number of prehistoric forts and dolmens. The field school is adjacent to a large, perfect fort, thought to have been inhabited from 400 to 1200 AD.

Following the field school’s accreditation by the National University of Ireland, Galway, students attending this unique field school can now gain academic credit for their course in their home universities. NUIG has in the region of 200 Erasmus bilateral agreements, and it has Erasmus links with some 130 European universities. When a student successfully completes a course, transcripts of academic credits are sent from NUIG to the home institution, and the student is thereby accredited.

The Irish Whale and Dolphin Group, working off the Atlantic coast, was established from an Irish stranding and sighting scheme, and campaigned for Irish territorial waters to be declared a whale and dolphin sanctuary. That occurred just six months after its establishment in June 1991; the Irish Government declared all Irish waters to be a whale and dolphin sanctuary – the first of its kind in Europe.

Only last month, the group encountered the world’s largest animals off the south coast of Ireland. Two blue whales were seen by its research team near the edge of the continental shelf. The sighting was significant, as there are estimated to be fewer than 4 000 blue whales in the entire northern hemisphere.

The group has engaged in research projects with the Galway-Mayo Institute of Technology, which is involved with 77 higher learning institutions across Europe. Students are able to obtain credits through the European credit transfer scheme.

Turning to culture and the arts, Clare is perhaps most famous for its traditional music. The Irish World Academy of Music and Dance in Clare has established links with traditional music groups such as those in Cnoc na Gaoithe, in Tulla, which is considered the home of traditional music in Clare. I welcome the possibilities that the European Higher Education Area affords to students, who will benefit in the field from these important resources.

THE PRESIDENT – Thank you. That concludes the list of speakers. I am sorry if I seemed a bit rude, but it was the only way to allow all speakers to participate in the debate, and I thought that that was the most important thing. I call Mr Connarty, the rapporteur for the second report, to reply. Mr Connarty, you have no more than three minutes.

Mr CONNARTY (United Kingdom) – I thank everyone who has spoken – those who support the report and those who challenge the logic of its conclusions. That is the freshness with which we deal with business in our committee. I must apologise to Ms Andersen; as someone who taught children with learning and physical difficulties for many years, I accept entirely that we should have specified that we are talking about “academic” ability, because this is not just about physical ability. If academic ability is specified, physical disability will not be a barrier.

I say to colleagues who argued on behalf of Ukraine in our committee that we understand that they have already taken note of some of the things we said in our addendum, and will make progress, but that is not grounds for accepting their amendment.

On Belarus, I say to respected colleagues that the fact that Belarus rectors are not getting visas is due to the fact that they expelled people from their universities because those people were not politically acceptable. The rectors obeyed the instructions of the government and interfered with their own academic autonomy in a very political manner. That is the judgment of the countries involved in the Bologna process, and we are simply supporting that.

Turning to my colleagues from Turkey, the reality is that their analysis is entirely flawed. To say, “We have a wonderful, productive institution that has been substituted in place of an autonomous, independent organisation” is entirely wrong. If you wish to have a university system that is productive in terms of its resources, that is legitimately a matter for the country’s Education Department, but it is not the legitimate role of that department, or any government department, to collapse an independent academic institution because it thinks that it is not productive enough. The government could have helped it, rather than destroying it.

As for arguing from what happened in the past, and criticising, do colleagues not know that two wrongs do not make a right? The things that Ms Bakir criticised are the very things that are happening now, under the current government. There are people who, although academically competent, are being locked up because they are politically unacceptable. Thousands of students are in prison because they protested against the government. They have not been charged, but they have been locked away, and that is not defensible.

I have to draw a parallel with a government minister in the UK who criticised lawyers who defended the Irish Republican Army; within a year, the paramilitaries on the other side had killed Pat Finucane and other lawyers. You cannot condemn people for their political affiliations if they are not involved in criminal matters. I think we have to stand by our position on Turkey, Ukraine and Belarus, but I thank members for their contributions.

THE PRESIDENT – Thank you, Mr Connarty. I call Mr Huseynov, the rapporteur for the first report, to reply. You have two and a half minutes left.

Mr HUSEYNOV (Azerbaijan) – Thank you, Mr President. Dear colleagues, today’s debate deals with issues that are urgent, important and historically significant. A middle-aged man imagines China as the most distant country. Probably the first aphorism relating to the integration process of education in the east is “Travel even to China if you travel to gain knowledge.” People have got used to travelling to various countries to get knowledge, and such trips have contributed towards the unification, completion and commonality of the education area.

I sincerely thank all the participants in our debate for their interesting ideas and views. What major points can be concluded from the debate? My initial conclusion is that everybody – or at least the majority – shares the opinion that the consolidation and international openness of the EHEA is an inevitable process and is certain to undergo further improvement. My second significant conclusion is that the EHEA is expanding from Europe to the rest of the world, and is covering new countries. The regulation of that process solely by means of educational policy faces definite hardship. Therefore, other member states and future member states should also strengthen their efforts towards ensuring the geographical conservation and international openness of the EHEA at a higher level.

My third important conclusion is that the educational traditions of various countries and the achievements obtained in the EHEA processes should be regularly shared, with the experience exchange implemented. Such continuous collaboration is the most expedient avenue towards making the EHEA belong to everyone. One of the major conclusions resulting from this investigation is that the EHEA will be enlarged absolutely and will therefore deal with a global process – education, which unites all humans positively and has an impact on a number of complicated problems, the solutions to which are beyond the possibilities of politics. Once again, I thank everyone for their valuable ideas, recommendations, proposals and participation.

THE PRESIDENT – Thank you, Mr Huseynov. The debate is closed.

Ms MEMECAN (Turkey) – On a point of order. I wish to correct something that the second rapporteur said about Turkey, as there are no –

THE PRESIDENT – That is not a point of order but a point of debate.

The Committee on Culture, Science, Education and Media has presented a draft resolution and a draft recommendation in Document 13009, “The consolidation and openness of the European Higher Education Area”, to which no amendments have been tabled, and a draft resolution in Document 12964, “Governance of higher education institutions in the European Higher Education Area”, to which three amendments and two sub-amendments have been tabled.

We will first consider the draft resolution and then the draft recommendation.

We will now proceed to vote on the whole of the draft resolution contained in Document 13009.

The vote is open.

The draft resolution in Document 13009 is adopted, with 35 votes for, 3 against and 1 abstention.

We will now proceed to vote on the whole of the draft recommendation contained in Document 13009. A two-thirds majority is required.

The vote is open.

The draft recommendation in Document 13009 is adopted, with 33 votes for, 3 against and 2 abstentions.

The Committee on Culture, Science, Education and Media has presented a draft resolution in Document 12964 and Addendum, to which three amendments and two sub-amendments have been tabled.

We will first consider Amendment 1 and its two sub-amendments. I remind members that speaking time on amendments is 30 seconds.

We come to Amendment 1, tabled by the Committee on Culture, Science, Education and Media, which is, in the draft resolution, after paragraph 6, to insert the following paragraph:

“The Assembly is also alarmed by reports about serious violations of academic freedom and institutional autonomy within the European Higher Education Area, in particular in Turkey and Ukraine. It therefore calls on the ministers participating in the Bologna Process, as well as the Joint ILO/UNESCO Committee of Experts on the Application of the Recommendations concerning Teaching Personnel (CEART), to monitor and combat such violations.”

I call Mr Connarty to support Amendment 1.

Mr CONNARTY (United Kingdom) – As we said in our speeches, we felt that we should specifically include the criticisms that are in the Addendum in our resolution. This is a very simple matter, and the committee obviously supported it with a majority.

THE PRESIDENT – We come to Sub-Amendment 2 to Amendment 1, tabled by Mr Kayatürk, Mr Dişli, Mr Çavuşoğlu, Ms Erkal Kara, Ms Memecan, Ms Bakir, Mr Popescu and Mr Plotnikov, which is, in Amendment 1, to delete the following words: “, in particular in Turkey and Ukraine”.

I call Ms Memecan to support the sub-amendment.

Ms MEMECAN (Turkey) – As I said in my speech, the citing of these two countries is unfair. I also wish to correct the second rapporteur’s statement that thousands of students are in jail – that is not the case; only students who have been involved in violence are in jail. I ask colleagues to support the sub-amendment and reject Amendment 1.

THE PRESIDENT – Does anyone wish to speak against the sub-amendment? I call Mr Connarty.

Mr CONNARTY (United Kingdom) – This was debated in detail in the committee. The Turkish delegation also submitted their arguments to the committee members in writing, but those were rejected by the committee. We feel that the sub-amendment should not be supported.

THE PRESIDENT – What is the opinion of the committee?

Mr CONNARTY (United Kingdom) – Wearing both hats, I can say that the committee is against the sub-amendment.

THE PRESIDENT – The vote is open.

The sub-amendment is rejected.

We come to Sub-Amendment 1 to Amendment 1, tabled by Mr Popescu, Mr Plotnikov, Mr Marmazov, Mr Slutsky, Mr Sakovskis and Mr Hajiyev, which is, in the proposed amendment, to delete the following words: “and Ukraine”.

I call Mr Plotnikov to support the sub-amendment.

Mr PLOTNIKOV (Ukraine) said that the assumption in the amendment that professional freedom did not apply in the Ukraine was unfounded and since 2012 there had been no cuts to funding.

THE PRESIDENT – Does anyone wish to speak against the sub-amendment? I call Mr Connarty.

Mr CONNARTY (United Kingdom) – Again, a submission was made in writing to the members of the committee, and we debated the matter in some detail. I recognise that Ukraine’s government is saying that it is trying to move in the correct direction, but clearly the criticism still stands and much still needs to be done to appease the committee. We therefore reject the sub-amendment.

THE PRESIDENT – What is the position of the committee?

Mr CONNARTY (United Kingdom) – Its position is clear.

THE PRESIDENT – The vote is open.

The sub-amendment is rejected.

Does anyone wish to speak against Amendment 1? I call Mr Popescu.

Mr POPESCU (Ukraine) said that the amendment still referred to Ukraine. Financing was no different in either eastern or western Ukraine.

THE PRESIDENT – What is the opinion of the committee?

Mr CONNARTY (United Kingdom) – We are obviously in favour, as it is our amendment.

THE PRESIDENT – The vote is open.

The amendment is rejected.

We come now to Amendment 2, tabled by Mr Sudarenkov, Mr Solonin, Mr Umakhanov, Mr Fetisov, Ms Nikolaeva and Ms Zhurova, which is, in the draft resolution, paragraph 6, to delete the last sentence.

Explanatory note: The first part of paragraph 6 clearly deplores the continuing violations of the autonomy of universities in Belarus.

I call Mr Sudarenkov to support the amendment.

Mr SUDARENKOV (Russian Federation) said that there were excellent students in Belarus and he could not agree to politicians having an influence over the life of those students.

THE PRESIDENT – Does anyone wish to speak against the amendment? I call Mr Connarty.

Mr CONNARTY (United Kingdom) – The committee supports the Bologna process, but Amendment 2 would remove any reference to Belarus.

THE PRESIDENT – The committee’s opinion is clear.

The vote is open.

Amendment 2 is rejected.

We come to Amendment 3, tabled by Mr Le Déaut, Mr Mariani, Mr Nachbar, Mr Rochebloine, Mr Bataille and Mr Rouquet, which is, in the draft resolution, paragraph 9, to replace the words “and encourages these institutions to associate” with the following words: “. It wishes governance to be organised around the notion of collegiality and encourages higher education institutions to associate “.

I call Mr Le Déaut to support Amendment 3.

Mr LE DEAULT (France) that it was important to encourage collegiality.

THE PRESIDENT – Does anyone wish to speak against the amendment? That is not the case.

What is the opinion of the committee?

Mr CONNARTY (United Kingdom) – The committee is in favour.

THE PRESIDENT – The vote is open.

Amendment 3 is adopted.

We will now proceed to vote on the whole of the draft resolution contained in Document 12964, as amended.

The vote is open.

The draft resolution in Document 12964, as amended, is adopted, with 35 votes for, 4 votes against and 0 abstentions.

4. Reference to committees

THE PRESIDENT – The Bureau has proposed a number of references to committees for ratification by the Assembly. They are set out in Document AS/Information (2012)09.

Is there any objection to the proposed references to committees?

There is no objection, so the references are approved.

5. Voting champions

THE PRESIDENT – I am pleased to be able to announce the names of our voting champions, those members who have taken part in most if not all votes during this part-session. They are: Ms Lise Christoffersen, Ms Erkal Kara, Mr Andreas Gross, Mr Gebhard Negele and Mr Björn von Sydow. I congratulate all of them. We have small gifts for the champions and invite them to come and collect them.

6. End of the part-session

THE PRESIDENT – We have now come to the end of our business. I would like to thank all members of the Assembly, particularly rapporteurs of committees, for their hard work during this part-session. I would also like to thank the staff and interpreters, both permanent and temporary, who have worked hard – and longer than agreed – to make the part-session a success.

The first part of the 2013 session will be held from 21 to 25 January 2013.

I declare the fourth part of the 2012 session of the Parliamentary Assembly of the Council of Europe closed.

The sitting is closed.

(The sitting was closed at 1.15 p.m.)

CONTENTS

1. Changes in the membership of committees

2. Restoring social justice through a tax on financial transactions

Presentation by Ms Naghdalyan of report, Document 13017, on behalf of the Committee on Social Affairs, Health and Sustainable Development

Speakers:

Lord Tomlinson (United Kingdom)

Mr Hancock (United Kingdom)

Mr Chope (United Kingdom)

Mr Villumsen (Denmark)

Mr Recordon (Switzerland)

Mr David Davies (United Kingdom)

Mr Kayatürk (Turkey)

Mr Giaretta (Italy)

Mr McNamara (Ireland)

Mr O’Reilly (Ireland)

Mr Gutiérrez (Spain)

Sir Roger Gale (United Kingdom)

Mr Reiss (France)

Mr Hanson (Estonia)

Mr Rouquet (France)

Mr Phelan (Ireland)

Mr Triantafyllos (Greece)

Ms Andersen (Norway)

Mr Farina (Italy)

Ms Fiala (Switzerland)

Ms Tzakri (Greece)

Mr Tilson (Observer from Canada)

Mr Boden (Luxembourg)

Mr Schennach (Austria)

Ms Auroi (France)

Mr Hunko (Germany)

Mr Simms (Observer from Canada)

Mrs Maury Pasquier (Switzerland)

Draft resolution contained in Document 13017 adopted.

3. Joint debate: the consolidation and international openness of the European Higher Education Area; and governance of higher education institutions in the European Higher Education Area

Presentation by Mr Huseynov of report, Document 13009, on behalf of the Committee on Culture, Science, Education and Media

Presentation by Mr Connarty of report, Document 12964 and addendum, on behalf of the Committee on Culture, Science, Education and Media

Speakers:

Ms Guţu (Republic of Moldova)

Mr David Davies (United Kingdom)

Ms Andersen (Denmark)

Mr Volontè (Italy)

Mr Schennach (Austria)

Ms Bakir (Turkey)

Ms Memecan (Turkey)

Mr Le Déaut (France)

Mr Sudarenkov (Russian Federation)

Ms Mateus Pi (Andorra)

Ms Bílgehan (Turkey)

Mr McNamara (Ireland)

Draft resolution contained in Document 13009 adopted.

Draft recommendation contained in Document 13009 adopted.

Amendment 3 adopted.

Draft recommendation contained in Document 12964, as amended, adopted.

4. Reference to committees

5. Voting champions

6. End of the part-session